June 16, 2013 - When management at Forex decided to relaunch its Ferme-Neuve sawmill in 2011, it did so with a new plan in mind. Two years and $3.5 million later, the plant is running at full speed with equipment designed to get more from a limited log supply.
“We will return to profitability this year in Ferme-Neuve,” says CEO Robert St-Martin with more than a little touch of pride. This success is in no small part because the mill has invested judiciously in boosting sawmill throughput and in advanced planer mill equipment to capture the highest value possible from each piece.
Like many mills, Forex deals with the area’s price rollercoaster. “If the price of wood is good today, chips are down sharply,” says St-Martin. “Paper mills are struggling, but we still manage to find a market. In this industry you’re at the mercy of wood and residual prices, you just have to be ready for the swings.”
When Forex bought the former Max Meilleur mill, management knew the performance would have to be improved in a hurry to reflect the region’s shrinking log supply. “Log costs are high and we have no control over it,” says St-Martin.
The main challenge is to keep unit costs and margins acceptable despite a sharp drop in annual production. The mill will produce 65 million board feet of boards and lumber this year (1X3s to 2X10s from six to 12 feet), in large part because it has lost up to 40% of its supply under Quebec’s new forest regime. There are options to recoup some of this loss through the private market or provincial timber bid systems, but the mill expects competition to be fierce in a region long-known for a tight fibre supply. St-Martin considers that at 100 million board feet, the mill’s profitability would be all but assured.
“But with 65 million, we’ll have to find a way to get there anyway.”
The first step involves log processing. Previously, tree-length material came directly to the mill. Now wood is processed in the forest and sent to the mill in preferred lengths, a move that has considerably decreased breakage and loss.
Inside the sawmill Forex has invested in a new Nicholson 17-inch debarker, Sawquip high-recovery machinery, focused production upgrades throughout, and up-to-date scanning and optimization from Autolog and USNR.
“We upgraded computers and software, and added a slew of scanning systems. Our system dated back a decade, so it was time. We replaced 50% of this type of equipment in one fell swoop.”
Forex then took a strategic look at where the largest gains in value recovery could be found. The focus soon turned to lumber that was already sawn and dried, and thus that the mill had already invested time and money in. “In our markets, it’s not rare to see as much as a $250 per thousand difference between select No. 2 and better, and economy. That makes grading and trimming in the planer mill very important. We simply cannot afford to leave any money at the table inside the planer mill through anything less than the optimum trim or grade decisions.”
Include monitoring for blue stain, decay, knots, white specks, splits, shake, bark and other local defects, as well as managing tricky species like balsam fir, and the optimum grade and trim decision can include a dozen parameters.
Prior to the upgrade, the mill ran with two graders per shift who struggled to keep pace without sacrificing grade recovery. Forex automated this step by adding an Autolog ProGrader, a lineal system that measures and automatically grades the lumber using three sets of sensors.
“The system primarily uses geometric sensors,” explains Gabriel Payant, director of marketing at Autolog. “It calculates the width, length, thickness and other features, such as holes. The system scans each piece at intervals of a quarter of an inch, with remarkable precision, three mils on thickness and 10 for the width.”
ProGrader uses four other vision sensors and high-definition cameras to detect visual defects. Finally, two other sensors above and below the piece monitor slope of grain and other potential defects. This is called the tracheid sensor, a central component of the system.
“All the data obtained from the range of sensors are transmitted in real time to computers,” Payant continues. Software combines all the information on each piece and applies the trim and grade decision according to the parameters of the Quebec Forest Industry Council (QFIC).”
The system stores this information in a Microsoft SQL database, which can be up to 150,000 pieces of wood with all their characteristics, including images. Each piece is numbered and the system provides this information by viewing even remotely on an iPad.
No room for error
QFIC standards specify that grading errors must not exceed 5% in one bundle of wood. At up to 3,000 feet/minute and upwards of 130 pieces/minute, the tendency for human graders is often to downgrade when in doubt.
“Under these conditions, a human grader is not as accurate as the machinery that never gets tired and works in fractions of a second,” St-Martin adds. “The Autolog tracheid system reads the actual pores of the wood and records up to 27,000 frames per second. For us, it combines to make the difference between a mill that will turn a profit or post a loss.”
As a result, the mill expects to see an ROI from its $1.3-million planer investment of one year or less.
Nor has the company finished investing in its sawmill in Ferme-Neuve. It plans to add one million additional dollars’ worth of equipment this year and next, in addition to the myriad small changes and tweaking that has been done, all to double the sawmill feed speed and allow it to remain on a single shift to produce its planned annual volume and annual revenues in the $20-million range.
Forex, which is a private company owned by the Cossette family from northern Quebec, finances its own improvements from its working capital. As a result, projects are prioritized carefully and expected to reap their returns on schedule.